CPCU 500, QUESTIONS SET, CHAPTERS 1 – 8
WITH VERIFIED SOLUTIONS 100% CORRECT
A Modular Policy Does - correct answer- 1.
Minimizes gaps and overlaps
2. Provides consistent terminology and definitions
3. Uses fewer forms
4. Makes underwriting more efficient
5. Reduces adverse selection when the same insurer provides
several types of insurance for the same insured
6. Results in a package discount when several coverage's are
included in the same policy.
A Self Contained Policy Can Be Either - correct answer-
1. Mono-line Policy
2. Package Policy
Advantages of improved decision making - correct
answer- 1. Increased profitability
2. Reduced earnings volatility
3. Improved ability to meet strategic goals
4. Increased managerial accountability
,Advantages of Retention - correct answer- 1. Lowers
long-run costs
2. Increases control over the claim process
3. Improves timing of cash flows
4. Encourages risk control
Advantages of transfer - correct answer- 1. Reduces
the financial uncertainty of losses
2. Reduces variability in cash flows
3. Provides ancillary Services
4. Avoids adverse employee and public relations
Approaches to Insurance Policy Construction - correct
answer- 1. Self Contained policy
2. Modular policy
3. Pre-printed Policy
4. Manuscripted Policy
Approaches used in property insurance to value property -
correct answer- 1. actual cash value
, 2. replacement cost
3. agreed value approach
4. functional value
As more participants join the pool, the pooling arrangement has
two effects on each participant's probability distribution. -
correct answer- 1. The variability of losses is reduced
2. The distribution of losses becomes less skewed
Benefits of ERM in addressing business uncertainties -
correct answer- 1. Improved decision making
2. Improved risk communication
Benefits of insurance - correct answer- 1.
Indemnification for loss
2. Reduction in cash flow uncertainty
3. Compliance with legal requirements
4. Loss control
5. Efficient use of resources
6. Support for credit
7. Source of investment funds
WITH VERIFIED SOLUTIONS 100% CORRECT
A Modular Policy Does - correct answer- 1.
Minimizes gaps and overlaps
2. Provides consistent terminology and definitions
3. Uses fewer forms
4. Makes underwriting more efficient
5. Reduces adverse selection when the same insurer provides
several types of insurance for the same insured
6. Results in a package discount when several coverage's are
included in the same policy.
A Self Contained Policy Can Be Either - correct answer-
1. Mono-line Policy
2. Package Policy
Advantages of improved decision making - correct
answer- 1. Increased profitability
2. Reduced earnings volatility
3. Improved ability to meet strategic goals
4. Increased managerial accountability
,Advantages of Retention - correct answer- 1. Lowers
long-run costs
2. Increases control over the claim process
3. Improves timing of cash flows
4. Encourages risk control
Advantages of transfer - correct answer- 1. Reduces
the financial uncertainty of losses
2. Reduces variability in cash flows
3. Provides ancillary Services
4. Avoids adverse employee and public relations
Approaches to Insurance Policy Construction - correct
answer- 1. Self Contained policy
2. Modular policy
3. Pre-printed Policy
4. Manuscripted Policy
Approaches used in property insurance to value property -
correct answer- 1. actual cash value
, 2. replacement cost
3. agreed value approach
4. functional value
As more participants join the pool, the pooling arrangement has
two effects on each participant's probability distribution. -
correct answer- 1. The variability of losses is reduced
2. The distribution of losses becomes less skewed
Benefits of ERM in addressing business uncertainties -
correct answer- 1. Improved decision making
2. Improved risk communication
Benefits of insurance - correct answer- 1.
Indemnification for loss
2. Reduction in cash flow uncertainty
3. Compliance with legal requirements
4. Loss control
5. Efficient use of resources
6. Support for credit
7. Source of investment funds
